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TMI Blog2018 (4) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner. Petition dismissed being barred by limitation. - Commercial Arbitration Petition No. 453 of 2017 and Notice of Motion No. 536 of 2017 in Commercial Arbitration Petition No. 453 of 2017 - - - Dated:- 19-4-2018 - R.D. Dhanuka, J. For the Appellant : F. De'vetre, Senior Advocate, Arun Siwach, Aditya Sikka, Priyanka Mitra, Neelakshi, i/b. Cyril Amarchand Mangaldas For the Respondents : Kishore Jawle, Raviraj Chilumuri, Shobhana Narayan, i/b. Khaitan Co. JUDGMENT R.D. Dhanuka, J. 1. By this petition filed under section 34 of the Arbitration Conciliation Act, 1996, the petitioner has impugned the arbitral award dated 28th April, 2017 passed by the learned arbitrator allowing certain claims made by the respondents. 2. The respondents have raised an issue of limitation in the petitioner's filing this petition allegedly beyond the period of limitation prescribed under section 34(3) of the Arbitration Conciliation Act, 1996. This Court has thus heard the learned counsel for the parties on the issue of limitation raised by the respondents first. Some of the relevant facts for the purpose of deciding the issue of limitation raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued a notice to the respondents under section 34(5) of the Arbitration and Conciliation Act, 1996 on 1st September, 2017. The petitioner lodged this arbitration petition (Commercial Arbitration Petition No. 453 of 2017) inter alia impugning the said arbitral award on 1st September, 2017. The petitioner also filed an affidavit in compliance with section 34(5) of the Arbitration and Conciliation Act, 1996 on 1st September, 2017. 8. Mr. De'vetre, learned senior counsel for the petitioner invited my attention to some of the annexures to the petition. It is submitted that the petitioner had received a signed copy of the award dated 28th April 2017 from the learned arbitrator on 30th April, 2017. Before expiry of three months from the date of service of copy of the award, the petitioner lodged the said arbitration petition bearing No. 400 of 2017 on 26th July, 2017. The petitioner however had issued a notice under section 34(5) and had filed an affidavit proving service of the said notice dated 28th July, 2017 i.e. after lodging of the said arbitration petition. He submits that the respondents however raised an objection before this court on 18th August, 2017 alleging non complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary, 2018 in case of Global Aviation Services Private Limited v. Airport Authority of India in Commercial Arbitration Petition No. 434 of 2017 alongwith companion matters and holding that even in those cases where the notice invoking arbitration agreement under section 21 was received by other party after 23rd October, 2015, the provisions under section 34(5) and 34(6) are directory and not mandatory. The Court has ample power to direct the petitioner to issue notice along with papers and proceedings upon the respondent after the petitioner files the arbitration application under section 34(1) and before such petition is heard by the Court at the stage of admission. 12. It is submitted that the doubt of the petitioner about the nature of the notice contemplated under section 34(5) was whether directory or mandatory was ultimately removed by this court in case of Global Aviation Services Private Limited (supra). 13. It is submitted by the learned senior counsel that the petitioner was thus prosecuting the earlier arbitration petition in good faith and with due diligence and thus the time taken by the petitioner in pursuing the Arbitration Petition No. 400 of 2017 i.e. durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. The said objection was recorded by this court in the said order dated 18th August, 2017. Inspite of the said specific objection raised by the respondents before this court and also in the affidavit in reply, the petitioner did not seek liberty to withdraw the said arbitration petition (400 of 2017) with liberty to file a fresh arbitration petition after complying with the provisions of section 34(5) of the Act immediately. He submits that the petitioner sought such liberty only on 31st August, 2017 when the matter again appeared on board and obtained such liberty to withdraw the said arbitration petition with liberty to file a fresh petition. 18. It is submitted that since the petitioner continued to prosecute the said arbitration petition (400 of 2017), inspite of such specific objection raised by the respondent on 18th August, 2017, the petitioner cannot be said to be have prosecuted the said arbitration petition in good faith and with due diligence. The petitioner thus cannot be granted any benefit of section 14(2) of the Limitation Act, 1963 and the time taken in prosecuting the said arbitration petition (400 of 2017) between 26th July, 2017 and 1st September, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat section 34(5) was inserted by Act 3 of 2016 w.e.f. 23rd October, 2015 in the Arbitration and Conciliation Act, 1996. The petitioner had received a signed copy of the award on 30th April, 2017 from the learned arbitrator. Before expiry of three months from the date of service of the signed copy of the award i.e. on 26th July, 2017, the petitioner lodged the said arbitration petition which was numbered as Arbitration Petition No. 400 of 2017. The petitioner however issued notice of lodging of such arbitration petition upon the respondents only on 27th July, 2017 and filed an affidavit on 28th July, 2017. The papers and proceedings were served upon the respondents by the petitioner at the earliest. The respondents filed an affidavit on 17th August, 2017 raising various issues including issue of maintainability of the arbitration petition on the ground of non compliance of the provisions of section 34(5). 23. On 18th August, 2017, when the matter appeared for the first time, this court recorded the said objection raised by the respondents and adjourned the matter to 31st August, 2017 for deciding the said issue. A perusal of the papers and proceedings in this arbitration petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled in this court without issuing prior notice as contemplated under section 34(5) and without accompanying with an affidavit of compliance as contemplated under the provisions. A group of such petitions were heard together by this court. By a detailed order and judgment delivered by this court on 21st February, 2018 in case of Global Aviation Services Private Limited (supra) it is held by this court that the provisions under section 34(5) and 34(6) are directory and not mandatory. In some of the petitions, the parties had complied with such provision. In some of the petitions, the petitioner had filed notice of motion for a declaration that no such notice was mandatory. In my view, Mr. De'vetre, learned senior counsel for the petitioner is thus right in his submission that there was a reasonable and bonafide doubt as to whether the said notice contemplated under section 34(5) of the Arbitration and Conciliation Act, 1996 was directory or mandatory. The parties had interpreted the said provision differently. 28. Supreme Court in case of India Electric Works Ltd. (supra) has considered the expression other cause of a like nature prescribed in section 14(2) of the Limitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enterprises (supra) has held that section 14(2) of the Limitation Act applies to the application filed under section 34(1) and can be considered if the conditions are satisfied for the purpose of computation of limitation under section 34(3) and benefit of exclusion can be granted. Supreme Court in the said judgment has held that due diligence cannot be measured by any absolute standards but is measured of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person under the particular circumstances. It is held that section 14 will not help a party who is guilty of negligence, lapse or inaction. However, there can be no hard and fast rule as to what amounts to good faith. It is a matter to be decided on the facts of each case. It will, in almost every case be more or less a question of degree. The mere filing of an application in wrong court would not prima facie show want of good faith. There must be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. In my view, the principles of law laid down by the Supreme Court would squarely applies to the facts of this case. 32. It is not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of jurisdiction. It is also applicable to cases where the prior proceedings have failed on account of other causes of like nature. Supreme Court in the said judgment adverted to the earlier judgment in case of Roshanlal Kuthalia and Ors. v. R.B. Mohan Singh Oberai, (1975) 4 SCC 628 in which it was held that Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstances, legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits comes within the scope of the Section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right. In my view the principles laid down by the Supreme Court in case of Union of India and others v. West Coast Paper Mills Ltd. and another (supra) and in case of Roshanlal Kuthalia and Ors. (supra) squarely applies to the facts of this case. 36. The respondents themselves had raised an objection across the bar as well as in their affidavit in reply that without prior notice under section 34(5) of the Arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63. Those findings were confirmed by the Supreme Court in the said judgment. The said judgment of Deena (dead) Through LRs. (supra) is distinguishable in the facts of this case and would not assist the case of the respondents. 40. Insofar as judgment of Allahabad High Court in case of Jagannath Prasad (supra) relied upon by Mr. Jawle is concerned, a perusal of the said judgment indicates that the appellant in that matter though, on the basis of the higher valuation of the appeal was required to file an appeal in High Court, filed the said appeal before the District Judge. An objection was immediately raised by the respondents in that appeal about the lack of jurisdiction of High Court. The appellant however continued to prosecute the said appeal before the High Court. The Allahabad High Court held that where the law is plain and does not admit of any doubt and the appellant or his agent could not possibly have any illusion as to the appropriate forum for presenting appeal, it would be a case of palpable negligence and would not be covered by the provisions of Section 14 of the Limitation Act. In the facts of this case however as already referred to aforesaid, large number of lit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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